It is typically advantageous for businesses to operate with relatively small inventory levels. Lower inventory levels allow businesses to minimize storage costs. Furthermore, lower inventory levels allow businesses to reduce risks from market changes such as fluctuating in price or demand.
To assist a business in maintaining lower inventory levels, it is known to provide accurate estimates of market supply and demand that are specific to the needs of that business. For instance, U.S. Provisional Application No. 60/264,321 and U.S. application Ser. No. 60/243,425 (incorporated herein by reference in their entirety) provide system methods to estimate, respectively, supply (planned arrival) and demand (planned orders) tallies for a business's products in particular markets. Given this estimated supply and demand information, a business may use scheduling tools such as U.S. application Ser. No. 09/974,801 and U.S. application Ser. No. 09/143,545 to coordinate the production/procurement of a good or service with the delivery of that good/service to clients. Similarly, given exact supply and demand data, a business may use a tool, such as U.S. Provisional Application No. 60/243,400, to coordinate this supply and demand. A business may further use tools such as these described in U.S. application Ser. Nos. 09/882,257 and 09/903,855 to organize on time low-cost shipments of orders. All of these references are hereby incorporated by reference in full.
Problems for business arise from unexpected changes in supply or demand. While the remainder of this application refers exclusively to increases in demand, it should be appreciated that the system and method described herein are equally applicable to unexpected decrease in supply. A typical example of an increase in demand is an unexpected order. In response to an unexpected order, a business may either reject that order, which is generally undesirable, or alter operations to meet the unexpected order. When a business chooses to alter its operations, the business then must select a least-cost strategy for satisfy the additional order while minimizing the effect on fulfillment of existing orders. An example of an unexpected decrease in supply is the loss of employees or the close of a factory, distribution center, or transportation lane. In response to an unexpected change in supply or demand, the business may need to adjust operations to meet existing order commitments.
Lack of distribution coordination and demand visibility results in excessive inventory costs, expedited shipments, decreased customer satisfaction, and lost revenues. A solution that orchestrates the flow and staging of inventory through a multi-echelon distribution network is an ideal answer for meeting customer service objectives while also minimizing inventory investment and logistics costs.